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According to a recent report from the National Association of Realtors (NAR), 61% of agents reported that buyers are interested in sustainability.

“Consumers continue to make it clear that environmentally friendly features and neighborhoods are an important factor in deciding where and what home to buy,” said Elizabeth Mendenhall, president of NAR and CEO of RE/MAX Boone Realty in Columbia, Missouri, according to Realtor Magazine.

Forty percent of respondents to NAR’s survey reported that their Multiple Listing Service (MLS) has green data fields, compared to only 15% that don’t.

Buyers’ preferences might include homes certified as “green,” which means they have been built or retrofitted with products for improved energy efficiency, or up to fully sustainable homes such as Earthships, designed by architect Michael Reynolds for true off-the-grid living, and net-zero energy (NZE) homes.

Green vs. Sustainable

Homes built to code with traditional materials can be certified “green” with sufficient insulation and energy efficient windows and appliances. But even green homes can leak around seals and entry points, and through the walls and ceiling, requiring occupants to run the heating, ventilation and air conditioning (HVAC) system to heat or cool the home.

An NZE home, on the other hand, is designed and built to be airtight. Triple-glazed windows, which include three panes of glass instead of the customary one to two panes found in regular windows, limit heat gain or loss, while also eliminating noise pollution. Thick walls maintain a steady internal temperature. For heating and cooling, many NZE homes use ductless air-based heat pumps, which have an outdoor compressor and an indoor air-handling unit, that circulate both warm and cold air at a very high efficiency.

Often, these homes are designed and constructed with alternative and repurposed materials — from salvaged wood to tires to glass jars — adding to their eco-friendliness. South-facing solar roof panels catch the midday sun, powering lights and the HVAC system. Excess power is shared through the grid with neighboring homes for credit that can be used during months when the home’s energy production is naturally lower.

With a typical American household spending more than $2,000 a year on energy bills, that savings makes going off the grid very attractive.

Builders Step Up

Although there is a learning curve, builders cite “increased customer demand” and “competitive advantage” as the reasons they are looking to grow production of net-zero homes in a 2017 study by Dodge Data & Analytics in partnership with the National Association of Home Builders (NAHB).  The same report found 29% of single-family home builders have built a net-zero home in the past two years, and 44% expect to do so in the next two years.

Getting What You Pay For

Standards are important to prevent “greenwashing,” which means to present a product as more environmentally friendly than it really is. Earth Advantage, for example, inspects the site, helps with design, runs airflow tests and stays involved throughout building an NZE home, said David Sailors, a Central Oregon broker and net-zero home expert. “That way buyers can be confident that the home is net zero.”

Mortgage lenders also like independent certifications since they provide reassurance that the property is what it says it is, he said.

Factoring in Savings

Although they certainly save on energy costs over time, building a NZE home will cost 5% — 10% more to build than a conventional home.

For many borrowers, though, paying a little more is worth the savings they’ll net in the future. “They may pay $15,000 more upfront to have an energy-efficient home, but the value of that home increases each year as they save more and more on utilities,” Sailors said.

Also, they’ll be able to sell for more. NZE homes are typically valued 10% — 15% higher than same-size traditionally built homes, he said.

Getting Help

There are green incentives offered by local agencies and utilities, as well as the federal government. There’s a 30% Residential Renewable Energy Tax Credit that covers solar electric as well as solar thermal (hot water) systems and a Residential Energy Efficiency Tax Credit that offers up to $500 for energy-efficient equipment upgrades in existing homes.

Depending on the home’s location, there may be income tax credits, low-interest loans or utility rebates available. Information about these programs can be found on the Database of State Incentives for Renewables & Efficiency website.

In some cases, incentives go directly to the homebuilder; in others, they go to the home buyer.

Poised for Growth

Sailors’ first 1,500-square-foot NZE home was on the area’s annual tour of green homes in 2008. “Not many people understood what we were doing,” he said.

That was then, this is now. Sailors’ firm works with buyers from nearby large cities like Seattle and San Francisco, who are looking to lower their carbon footprint and live in communities that support a conservational lifestyle. They want to harvest rainwater to reduce reliance on a municipal supply and use recycled shower water to flush toilets. They want to treat sewage onsite with botanical cells and use it to nourish landscaping. They want to grow fresh vegetables and fruits and compost table scraps or use them to feed chickens or other livestock.

As millennials (born between the early 1980s to early 2000s) continue to enter the market, Sailors predicts an upswing in the number of buyers looking for green and NZE homes.

“Millennials care about the planet, and they do their research,” Sailors said. “They want to live in a way that’s more environmentally friendly.”

“The financial payback of these homes is enticing but it’s never the deciding factor.”

If you’re ready to start the home buying process, you can apply online through Rocket Mortgage ® by Quicken Loans. If you’d rather speak to one of our Home Loan Experts about your goals of homeownership, call us today at (800) 785-4788.

This Post Has 4 Comments

  1. any lenders doing off grid homes, refi or other, we currently have mortgage and need to upgrade, mike

    1. Hi Mike:

      We generally don’t do off grid homes, but we may be able to help if it’s a common situation in your area. I’m going to recommend and we speaking with one of our Home Loan Experts at (888) 980-6716. Have a great day!

    1. Hi Joe:

      We don’t build modular or manufactured homes and we only do lending in the United States. I’m sorry. Have a good day!

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